Amazon accounted for 43% of US online retail sales in 2016. In Germany it’s market share was around 30% in the same year. eBay is the undisputed synonym for Online auctions and C2C eCommerce in many countries. Nevertheless, there are markets where Amazon and eBay struggle to gain a foothold. iq! works a lot with clients who intent to start selling Online abroad. The BRIC countries often play a special role within these eCommerce plans. But only in India it is wise to start Business with Amazon which managed to conquer the pole position in the Consumer-focused Online Shopping race. The other three countries are dominated by local competitors so strong that every newcomer from the outside hardly stands a chance against them.

Leading B2C/C2C Websites in BRIC countriesSource: iq! Managementberatung based on different market studies

Amazon and eBay in BRIC: China

China is the largest and one of the fastest growing eCommerce markets in the world. Amazon entered China in 2004, but despite of buying jojo.com (the largest online bookstore in China) as first strategic move, it had no chance against emerging Internet giant Alibaba. Alibaba’s subsidiary TMall controlled around 56.6% of the B2C Online market in China in 2016. Amazon appears down the list with a meager 0.8% as an „also-run“.

Leading B2C eCommerce Stores in ChinaSource: eMarketer

eBay even had a first mover advantage against another subsidiary of Alibaba who entered the market later and now is the top auctioning platform in China: Taobao. One important reason for Taobao overtaking its US rival so fast was the fee scheme of the two companies: eBay entered with the same commission-based system than in the US while Taobao only charged for promotions. That counted a lot in price-sensitive China.

Amazon and eBay in BRIC: India

Amazon learned from its mistakes in China. It is market leader now in India with good prospects of further staggering growth. Entering late (in 2013), it outpaced local competition. eBay in contrast failed to gain a significant sales volume. Indian customers were not as enthusiastic as elsewhere about it’s business model. Therefore, eBay was incorporated in 2017 in Flipkart.com, a big local eCommerce competitor. It still operates, but it’s significance is far lower than in other countries.

Amazon and eBay in BRIC: Russia

Amazon and eBay have no significant operations in Russia. Amazon only ships certain goods to the country. The eShop that resembles Amazon most is Ozon with a very wide assortment. Nevertheless, the biggest eCommerce player is Ulmart, which is a multi-channel retailer that operates physical stores, too. Molotok.ru was a significant player comparable to eBay but stopped operations in 2015.

Amazon and eBay in BRIC: Brazil

MercadoLivre operates the leading platform for auctions and classifieds in Brazil and other Latin-American countries. eBay holds 19% of its shares and the two companies are cooperating closely. Since 2017, Amazon only sold books in Brazil. Last year, it added a few other categories to it’s offer. So it is still a matter of speculation, how successful Amazon will become in Latin-America’s biggest economy. Fiercest competition will come from market leaders CNova and B2W Digital.

Evaluation Amazon and eBay in BRIC:

Amazon and eBay dominate the US market and have a major foothold in many European countries. But market entrance in other countries, as seen, is not that simple. Here are some of the main reasons, why Amazon and eBay are struggling to gain market shares in most of the BRIC countries:

Political obstacles: In some of the BRIC countries, it is not easy for foreign companies to open up operations due to different legal obstacles. Local companies get preferred conditions and treatment

Local taste: The product portfolio cannot simply be copied from the US, many customers in BRIC markets prefer local brands and local products

Price-sensitivity: Customers in most of the BRIC countries are very price-sensitive. Amazon and eBay often simply cannot compete with prices of local competition

Distribution: Reasonable infrastructure and distribution options are often limited to areas of high population density. Access to more remote parts of BRIC countries is a challenge

Payment structure: A smaller part of the BRIC population owns a credit or debit card. Therefore local eCommerce providers offer alternatives like cash on delivery, etc. Organizing such structures is not easy for new entrants

First mover advantage: big local rivals often have a huge number of registered users at the time Amazon and eBay are entering

Conclusion

Amazon and eBay have to adapt to local conditions if they want to be successful in BRIC markets. This is possible, like the example of Amazon in India shows. For manufacturers or retailers wanting to enter online markets abroad, it is very important to know the local competitive environment in detail. Only then, one can choose partners and preferred platforms wisely, especially when operating in a niche market segment or B2B industries.